Film black gold written response - Essay Example

Download file to see previous pages The export revenue from coffee seems like a decent enough percentage but its actual significance is something else altogether. Export revenue of 70% in Ethiopia is very small, failing to reach any amount greater than the $500 million mark. However, the $500 million used to import the coffee from Ethiopia has been churned into billions when they arrive at the markets.
From a casual look, one would expect the producers of coffee to be very rich and live in lavish conditions, filled with unfathomed and consistent prosperity. The contrary holds true, however. In Ethiopia, a kilogram of coffee goes for a paltry $1, where as in the importing markets, this same kilogram is used to make approximately 80 coffee cups which sell at an average total of $230. This shocking evaluation alone screams of an unpalatable equality, even if other things fail to reveal this fact of an undesirable difference in fortunes. The world coffee market is largely dominated by four principal multi-global enterprises. These are the Proctor and Gamble, Sara Lee, Nestle and Kraft. These enterprises buy their coffee at very low prices, yet in turn sell the same at very exorbitant prices. In the end, therefore, the margins for profits that they accrue if astoundingly high and incompatible with what they producers earn from this coffee trade (Black gold, 2006). In the world market, the second most actively traded commodity is coffee. The prices of coffee are determined by the NYCSCE (that is, the New York Coffee Sugar and Cocoa Exchange). Buyers and sellers are merely market price takers and have no power to decide on the trading prices of coffee.
In as much as coffee is regarded in nature as a soft good, principally because it is meant for consumption, it is yet important and irreplaceable, with its essence noticeable through and through in the markets. Coffee has possession of its own market that controls prices, whereby these prices are normally adhered to by ...Download file to see next pagesRead More